How To Apply For And Get A Business Credit Card (2024)

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Applying for a business credit card is simple but requires diligent research and preparation, like any financial decision. Before you apply, be sure to do the following:

1. Determine Your Eligibility

All types of business structures can apply for a business credit card. That includes:

• sole proprietorships or freelance work
• partnerships
• limited liability companies
• corporations

The size, age or nature of your company doesn’t matter for business card eligibility. You can apply for a business credit card even if you founded your company last week. As long as you intend to make a profit from selling goods or services, you have a business. So don’t count yourself out if you’re a part-time freelancer or an eBay seller—these are legitimate businesses.

The first step in applying for a business credit card is determining which cards you have a realistic chance of qualifying for. Generally speaking, a credit card issuer will evaluate your personal credit history to determine whether your business qualifies for a credit card. That means it’s important to maintain healthy spending habits and regular payments on your existing personal accounts to maintain a strong credit score and improve your chances of getting a business card.

Major business assets and revenue can also help your odds of approval as well as qualify your business for a higher credit limit. But if your business is new, the approval decision will depend almost entirely on your personal credit history.

2. Gather Required Information

A business credit card application will usually ask for information such as:

• Business name
• Business address
• Annual business revenue
• Number of employees
• Estimated monthly spending on the credit card
• Employer Identification Number (EIN) and/or owner’s Social Security number
• Business structure
• Business description

Note that if your business doesn’t have an EIN, you can submit your SSN in its place.

Most business card applications will also require the owner’s personal information since the owner will be expected to give a personal guarantee. The credit card issuer may have follow-up questions about the business during the application process. Be honest and provide any documentation requested. Even if your new business’ current income is low or nonexistent, it’s better to disclose this. Be ready to discuss your business and plans for its growth.

It may help to seek out business credit cards offered by banks you already have a relationship with—this can make the application process more comfortable, efficient and successful.

How To Get a Business Credit Card With Bad Personal Credit

Since business card approval usually hinges on your personal credit history, getting a business credit with a less-than-stellar personal credit report can be challenging. Your options will likely be limited to secured business credit cards requiring a security deposit.

There’s no way to guarantee approval on any credit card application, but there are some things you can do before applying that should increase your chances of success:

• Avoid maxing out any personal or business cards you already have.
• Apply for new credit sparingly to minimize hard inquiries on your reports.
• Identify the correct business structure to list—for example, if you sell handicrafts on Etsy or write freelance articles online, you might be operating as a sole proprietor.

Responding to a credit card preapproval offer may also improve your odds.

The card issuer will check your credit once you submit a business card application online. After the credit check is complete, cardholders deemed creditworthy by the lender may see an approval.

Credit cards for businesses can be similar to personal credit cards in terms of perks and reward structures, but many offer higher spending limits and improved reward earnings for business-specific categories such as office supplies, advertising and shipping expenses. Business credit cards also provide business-focused features such as tools to help track spending across various categories or by employee cardholders. With most business cards, expense information is available for download to your business accounting software, making record-keeping easier.

Your business doesn’t need an employer identification number (EIN) to apply for a business credit card. The owner’s SSN will usually be required in the application process. In most cases, the owner is expected to provide a personal guarantee for the business credit card so their personal credit history is used to determine business creditworthiness.

However, if your business has an EIN, it’s beneficial to provide it in addition to the owner’s SSN when applying for a business card as the EIN identifies the business to commercial credit bureaus and helps to establish business credit history.

Higher Credit Limits

Business credit cards often have a higher credit limit than personal cards since both business and personal revenue are considered. As the business starts to demonstrate sales growth and builds its credit history, it becomes easier to increase credit card spending limits and successfully apply for loans or lines of credit.

A higher credit limit allows you to make more purchases in a single statement period without maxing out the card. This avoids a large increase in your credit utilization—the ratio of your credit card’s balance to its assigned spending limit. Credit utilization is a significant factor in determining your credit score—a lower utilization ratio is desirable.

Access to more credit funding helps with cash management, providing funds when incoming cash doesn’t match the timing of cash outflows. This is especially useful for small businesses with financial constraints.

Building Business Credit

Getting a business credit card and using it responsibly can help your company build a credit history, which is important for future funding. Like individual consumers, businesses have credit histories, reflecting spending, payment and revenue patterns.

A strong credit history increases your business’ credibility and reliability in the eyes of credit card companies, banks, vendors and investors. A business, like any individual, will also benefit from lower interest rates when a business credit bureau reports a clean record and a steady payment history.

To establish business credit, add your company’s EIN to the credit card application, as the EIN is used to track your company’s credit performance.

Better Business Financial Records

A business credit card enables more accurate and organized financial reporting by separating personal expenditures from business expenses. Better financial data means improved record-keeping and fewer headaches at tax time.

As with any type of loan, there are risks associated with credit cards. As a business owner, there are some things to be aware of before getting a business credit card.

• The balance on the credit card is ultimately your responsibility—as a business owner, you’ll usually be required to provide a personal guarantee for your business card. The owner becomes personally liable for the debt if the business doesn’t pay off the entire card balance when due.
• Any delinquencies or derogatory items occurring on the business card account would likely be reported to consumer credit bureaus, which negatively affects the owner’s personal credit score.
• Since most cards have a preset credit limit, it may be more difficult to manage them if your business’ monthly spending varies drastically. There are also charge cards with no preset spending limit and instead adapt based on factors such as your spending and payment history.

Also, be aware that business credit cards aren’t covered under the Card Act of 2009, which protects consumer credit card customers. For example, the Card Act requires issuers to provide consumers with advance notice before increasing an account’s APR—but notice isn’t required for business cards.

If you’re launching a new business, getting a business credit card can help you manage startup costs and track expenses. Plus, earning a welcome bonus and rewards on your business spending can be a good way to offset some of your costs.

However, if your business isn’t established, you may wonder how to best prepare so your application for a new card isn’t rejected. Here are three steps to set you up for success when getting a business credit card for your startup.

1. Research Your Options

Start with your current bank and see what options it offers. If you already have a business checking account, getting approval for a business credit card from the same institution may be more likely due to your preexisting relationship.

However, if your bank doesn’t offer what you need, shop around to find a more suitable credit card. When choosing a card, consider the benefits such as welcome bonuses, rewards and credit limits. Also, consider annual fees, foreign transaction fees and interest rates. Understand fully how each card works and read through the terms and conditions carefully before submitting an application.

2. Check Your Credit Before Applying

Credit card issuers will likely require your SSN to check your credit history. When you provide a personal guarantee, you become personally liable for your business credit card’s balances, including all employee transactions.

Credit card issuers naturally seek to reduce risk. They want to ensure you’ll pay your bills on time and won’t default on what you owe. The higher your credit score, the higher the likelihood you’ll be eligible for better cards, higher credit limits and lower interest rates.

3. Apply for Your Business Credit Card

You’ll need to collect several pieces of personal and business information to complete your business credit card application:

• Legal business name, address and phone number
• Type of business and industry designations
• Legal business structure
• Federal tax identification number (business EIN and/or your SSN)
• Number of employees
• Approximate annual business revenue
• Estimated revenue
• Estimated monthly expenses on the credit card

We don’t advise that you apply for more than one credit card at a time. It’s generally better to apply for the credit card that best fits your business needs and that you’ll most likely qualify for rather than trying to apply for multiple cards simultaneously. Applications generate hard inquiries on your credit report, which temporarily lowers your credit score—and multiple inquiries in a short period can make you seem desperate for credit, leading to rejections.

The right card for your business will depend largely on how you operate your business, what types of purchases you make and the benefits you want to earn. Do you travel often for business? Do you frequently take clients out for meals? Does the business have significant expenses in specific categories, such as office supplies, gas or advertising? Do you need access to 0% APR funding?

The answers to these questions will help you identify the best business card for your needs.

If your business is young or you’ve never opened a business account before, selecting the right business card can help set you up for success. For example, a card with a 0% intro APR period on purchases can help you finance big-ticket items as you’re getting your business operational. And earning cash back can help offset some spending in common business categories.